TOMS: Impact and effectiveness of “buy one, give one” model

For the greater part of a decade, TOMS shoes have been a mainstay in regular footwear. Just like any other shoe, consumers have a variety of reasons for wearing them, including the feel of the canvas or cotton material, the unique comfort, or the company label. The niche the company occupies is its social value: For every pair of shoes purchased, one pair is donated to a rural neighborhood in a developing country. Since 2006, over 50 million pairs of shoes have been donated to communities in need.1

Blake Mycoskie, founder of TOMS Shoes. Source: TOMS Shoes

Recently, the social impact of this model has been questioned. Researchers from the University of San Francisco published a paper in January 2016 investigating whether the donation of massive quantities of shoes in rural El Salvador was tangibly increasing health outcomes in the region. Health outcomes were categorized in two ways. First, general health outcomes like abdominal pain, fever, dizziness, and diarrhea, etc. were measured. Second, foot health was measured with respect to cuts, infections, blisters, sores, and a general foot health index combining a number of these metrics. The authors concluded the net impact of TOMS’s shoe program was minimal at best: “the overall impact of the shoe donation program appears to be negligible, illustrating the importance of more careful targeting of in-kind donation programs.”2 Amy Costello, the founder of a podcast called Tiny Spark that investigates the efficacy of nonprofits and international aid, used this research to conclude that the company should redirect its efforts towards more fundamental causes of poverty such as a lack of education and access to clean water.3

From a moral and economic perspective, Ms. Costello’s argument is understandable. If the power of every dollar spent on creating donated shoes could be amplified by spending on root global health issues, she argues all funds should be allocated towards this more impactful goal. However, from a practical perspective there are several issues with this point.

Source: Flickr Creative Commons

First, TOMS shoes serve more than 70 countries, and each of these countries has its own root poverty causes. Analysis of these factors and proper poverty reduction programs should be conducted at a grassroots level, best accomplished by NGOs rather than by multinational corporations like TOMS.

Second, unaccounted in Ms. Costello’s thesis, is the watershed effect of TOMS’s One-for- One Program. A study conducted by Christopher Marquis and Andrew Park of Harvard Business School illustrates this point: “The success of TOMS has encouraged other entrepreneurs, both social and otherwise, to adopt similar business models…younger enterprises, such as Soapbox Soaps and Two Degrees Food, are promoting buy-one, give-one models as solutions to poor hygiene and childhood hunger.”4 Thus, TOMS’s innovative social program exponentially multiplied the solutions for extreme poverty in a way that TOMS as an individual company could not have accomplished on its own.

Finally, as Ms. Costello concedes in her piece, TOMS is growing and adjusting its strategy to tackle the root causes of global health issues. Along with shoe donations, TOMS has expanded to three more areas. First, a purchase of eyewear from TOMS supports prescription glasses, eye surgeries, and medical treatment—a crucial need in developing countries where cataract prevalence is particularly high.5 Second, for every bag of TOMS Roasting Co. Coffee, a week’s supply of clean water is provided to a community in need.6 Through this program, over a quarter million weeks of water have been donated. Finally, the purchase of a TOMS bag helps fund the training of birth attendants and ensures safe births across the globe.7 Taken together, these findings suggest that TOMS is a flexible, adaptive company. It is taking criticisms like Ms. Costello’s into account by expanding its one-for-one promise into the more basic global health needs of developing countries, and for this TOMS deserves a lot of credit.

Akhil Upneja is a rising senior in Morse College majoring in Molecular, Cellular, and Developmental Biology. He can be contacted at akhil.upneja@yale.edu.